City’s Capital Plan Grows: More Projects, Some More Spending

A number of fiscal mavens have voiced concerns in recent months that the city’s capital budget is too big and unaffordable. These concerns have not escaped the notice of Mayor Bloomberg, who has sought to reduce the amount the city spends on debt service—the interest and principal the city pays to borrow money for capital projects such as building schools, fixing roads, and buying fire trucks—by scaling back the city’s 10-year capital plan.

So it may come as a surprise to many observers that the city’s latest Adopted Capital Commitment Plan, which covers four years, has grown by hundreds of projects and millions of dollars. The Adopted Capital Commitment Plan, released in September, presents information on how much the city has appropriated in the current fiscal year and next three years for capital projects and a timeline for committing those project funds. This latest plan adds $708 million (adjusted for capital funds made available in 2009 but now pushed into the new plan) and nearly 700 capital projects, compared to the prior plan released in conjunction with the Mayor’s Executive Budget last spring. As in past years, the largest shares of capital funding go to school and environmental projects.

The city’s four-year capital plan allocates $38.4 billion for projects. Included in the plan total is $1.5 billion allocated at the request of the City Council and $680 million by the Borough Presidents. Roughly 80 percent of the funding comes from the city, with the remaining $7.8 billion coming from federal, state, and private grants.

These funds support nearly 7,400 projects (including school projects that are itemized separately in the city’s financial management system). The Adopted Capital Commitment Plan includes 941 new capital projects and drops 244 projects that were part of the prior plan. The new projects include 390 sponsored by the City Council and 108 sponsored by the Borough Presidents. Out of all the new projects certain types were among those most commonly added: there are 123 new citywide equipment purchases and 101 new parks and recreational facilities projects.

Nearly half of the plan’s total budget—$19.0 billion—is scheduled to be committed in fiscal year 2010. The rest of the funds are expected to be committed over the next three years: $6.9 billion in fiscal year 2011, $5.6 billion in fiscal year 2012, and $6.8 billion in fiscal year 2013. While the total for 2010 appears comparatively large, it is actually bulked up by previously authorized funds. Because some types of capital projects frequently fall behind schedule, the level of funds authorized by the Mayor’s budget office typically exceeds the expected commitments by about 35 percent.

Roughly $7.1 billion in capital funds were transferred, or rolled, from fiscal year 2009 into the new plan. Most capital funds rolled from a prior fiscal year tend to be allocated to the next year, as is the case under the new plan. But some of the funds rolled forward are also allocated to later years of the Capital Commitment Plan. Largely because of the funds rolled forward from 2009, the new plan is roughly 25 percent bigger than the prior $30.6 billion four-year plan.

But if you subtract the rollover funds, the latest plan still provides $708 million more (2.3 percent) than the prior plan. Almost all of this increase comes from additional city funding; about 1 percent of the $708 million comes from other sources.

Despite challenging economic times and recent actions by the Bloomberg Administration to curtail long-term city-funded capital spending, the city’s capital program continues to expand moderately.